Employees could punch in anytime between 800 and 1000

flexible. Employees could punch in anytime between 8:00 and 10:00 a.m. and leave nine hours
later, between 5:00 and 7:00 p.m. Managers were expected to keep monthly notes on the people
working for them and make yearly recommendations to the human resources committee about
raises, bonuses, promotions, and firings. Except for their one-hour lunch break, which they could
take at any time, employees were expected to be in the building at all times.
Puzzled, Thornton went down to the lounge where the research and development people

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gathered. She was surprised to find a time clock on the wall. Curious, she fed a time card into it
and was even more flabbergasted when the machine chattered noisily, then spit it out without
registering the time. Apparently R&D was none too pleased with the time clock and had found a
way to rig it. When Thornton looked up in astonishment, only two of the twelve employees who
had been in the room were still there. They said the others had "punched back in" when they saw
the boss coming.
Thornton asked the remaining pair to tell her what was wrong with company rules, and she got
an earful. The researchers, mostly chemists and engineers with advanced graduate degrees,
resented punching a time clock and having their work evaluated once a month, when they could
not reasonably be expected to come up with something new and worth writing about more than
twice a year. Before the implementation of the new rules, they had often gotten inspiration from
going down to the local dime store and picking up five dollars worth of cheap toys, but now they
felt they could make such trips only on their own time. And when a researcher came up with an
innovative idea, it often took months for the proposal to work its way up the company hierarchy
to the attention of someone who could put it into production. In short, all these sharp minds felt
shackled.
Concluding that maybe she had overlooked the rigidity of the rules, Thornton walked over to the
manufacturing building to talk to the production supervisors. They responded to her questions
with one word: anarchy. With employees drifting in between 8:00 and 10:00 and then starting to
drift out again by 11:00 for lunch, the supervisors never knew if they had enough people to run a
particular operation. Employee turnover was high, but not high enough in some cases;
supervisors believed the rules prevented them from firing all but the most incompetent workers
before the end of the yearly evaluation period. The rules were so "humane" that discipline was
impossible to enforce.
By the time Alice Thornton got back to her office, she had a plan. The following week, she
called in all the department managers and asked them to draft formal rules and procedures for
their individual areas. She told them she did not intend to lose control of the company, but she

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wanted to see if they could improve productivity and morale by creating formal procedures for
their individual departments.